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Big increase in agency workers as firms fill staffing gaps

A tight labour market and lower migration will pose a challenge to firms using agency workers, says think tank.

The number of agency workers has grown to 800,000 after a 40% increase over the past decade, but firms might have to rethink their approach because of changes to the labour market and lower migration, says a report.

Research by the Resolution Foundation found that most firms use agency staff to fill gaps in their organisation because of holidays or absence or as a “last resort”.

A third of firms believe agency staff are cheaper than employing full-time workers, but a similar number believed they were more expensive.

For a significant minority of firms, costs, convenience and control all play an important part in explaining their reliance on agency workers The Resolution Foundation

A survey of 500 managers found that other reasons for hiring agency staff included seasonal demand or outsourcing training and payroll.

One in four of those questioned said they planned to increase their use of agency workers over the next few years.

Lindsay Judge, senior policy analyst at the Resolution Foundation, said: “Demand for agency workers grew significantly over the last five years – particularly among firms who use them as a core part of their business model and have become agency worker-reliant.

“But with the latest data suggesting the growth in agency workers has tailed off, such businesses may find that they have to rethink their plans.

“Our survey of firms busts a number of myths. Agency workers are still used largely as a stop-gap measure, but for a significant minority of firms, costs, convenience and control all play an important part in explaining their reliance on agency workers.”

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